Qualcomm Adopts Language-neutral, Money-making Pose for BREW
thefeature.com
By Ray Hegarty, Aug 27 2002
Emphasizing support for C++ and Java applications, Qualcomm appeals to developers' and carriers' bottom line.
Qualcomm's Internet Services (QIS) group spoke with us in New York this week to give an update on the company's BREW (Binary Runtime Environment for Wireless) developments and plans for the future. BREW developer Jamdat Mobile joined in to provide a developer's perspective. Qualcomm wanted to impress on us the advantage of BREW as a complete end-to-end solution that incorporates billing, security and application certification. As such, QIS argues, BREW offers developers a superior money-making opportunity.
Impact assessment
The message
BREW provides carriers and developers with an end-to-end solution including billing, security and application certification. As such, QIS argues, BREW offers developers a superior money-making opportunity. Competitive landscape
The Sun-inspired and Nokia-, Motorola- and Ericsson-driven J2ME value chain is fragmented. While Sun provides technology guardianship over J2ME, it has put billing, security and application certification, as well as a sustainable business model, in third parties' hands. Qualcomm is attempting to exploit the absence of a cohesive revenue opportunity for J2ME apps. The451 assessment The battle between BREW and Java is shifting from a technology to a business-model focus. We expect Sun and its supporters, including Nokia and Motorola, to make several J2ME business-oriented announcements over the next few months.
Context The BREW platform enables developers to create applications that operate on CDMA handsets. BREW sits between the chip system software and the application. QIS argues that BREW simplifies the development of wireless applications by eliminating existing programming problems, such as an individual programmer's lack of knowledge of some of the handsets and their internal software.
BREW is licensed to third-party application developers free of charge, and provides a Windows-based software development kit that includes an emulator. Once an application is created, it receives 'True BREW' certification and is placed for sale in a distribution catalogue. QIS sells the BREW product, and is responsible for developing and selling software to service providers.
Customers KT Freetel, one of South Korea's major carriers, was the first carrier to deploy 1X and BREW, and it is the furthest along in upgrading its subscribers to data services. QIS has clearly been successful in South Korea. As the available content has grown and 1X penetration increased, the South Korean carrier has seen the wireless Internet portion of its ARPU (average revenue per user) grow dramatically. Qualcomm is touting its experience with KT Freetel as an example to carriers worldwide.
So far, QIS customers include Verizon Wireless (US), AllTel (US), and Telesp Cellular (Brazil). More than one million users have purchased BREW-enabled handsets worldwide. QIS handset partners include Samsung, LG Electronics, Kyocera, Hyundai, Hitachi, Toshiba, Sharp, Sanyo and others. Verizon is planning to eventually offer a full range of wireless services, and is allying with consulting firm Accenture to market and sell mobile enterprise applications.
Competition While the market has pitted BREW against Java, Qualcomm has stepped up its attempt to position BREW as neutral, in terms of development language – supporting C++ and Java applications – browsers and other environments. Insignia is developing an MIDP BREW extension, while IBM is also developing a BREW extension to its JVM, the company points out.
In addition, senior director of marketing Jeremy James says QIS is talking to a "major European carrier" about deploying BREW over its GPRS network. If successful, the development would represent a major breakthrough for Qualcomm, whose interest has been to develop CDMA 1x at the expense of the competing GPRS networks. BREW's success will be measured by the level of developer and wireless carrier acceptance, the number of applications, and subscriber enthusiasm (generating revenue and profit). Breaking BREW into the GSM/GPRS Java-dominated European market would expose Qualcomm to a much more consumer-driven market than that in the US.
QIS claims that between 10,000-16,000 BREW software developer's kits have been downloaded, and that 500 BREW applications are available worldwide. BREW application developers include Sega, Mattel, Jamdat and MediaSoft, among others.
The BREW business model has been criticized for the role that Qualcomm plays in the distribution of revenue and the BREW certification process. Qualcomm admits that the criticism has impacted market acceptance, but QIS senior director of product management, Jason Kenagy, claims that several wireless carriers and developers that were suspicious initially have come around to its model. The usually structure of revenue splits between carriers and content providers is: 80% to the application developer and 20% split between Qualcomm and the carrier. This rule is not set in stone, however, which led to initial wariness. Jamdat Mobile CEO Mitch Lasky is of the opinion that early suspicion over the QIS model has now been replaced by acceptance by the majority of the developer community.
Qualcomm accepts that Java has a real foothold in the wireless market, with a great deal of developer mindshare, but it thinks it can win carriers and developers over to BREW by exploiting the fragmented nature of the J2ME market. In its opinion, developers are finding J2ME difficult to get to market, and Sun's failure to establish a coherent distribution model is a weakness that it plans to exploit. We expect Qualcomm to bump heads with Nokia's Tradepoint and Motorola's Wireless Village on this matter.
It will be interesting to see how the battle between BREW and Java develops. Creating a BREW application isn't cheap. As well as the testing and certification process, developers require an ARM compiler for executing on a handset; the free SDK creates only an app that compiles on a PC. By contrast, a Java developer can choose to post the application on any website without going through such a process, although as Qualcomm rightly points out, the chances of making any money are much reduced.
Future developments BREW is to be incorporated in Qualcomm's MSM6050 chipset, which will allow handset manufacturers and developers to more quickly and easily develop both embedded and downloadable components.
We remain skeptical about the prospects for increased consumer ARPU from data in the US. There are many issues that we have described in the past that need to be resolved for high-speed data to be a success, ranging from standards, software and billing to handset issues. US wireless consumers also continue to receive poor quality of service compared with their Asian and European counterparts. Qualcomm expressed a continuing sense of frustration with US wireless carriers' consumer data pricing and marketing strategies.
We think it positive, therefore, that QIS plans to put more effort behind BREW-enabled business apps over the coming months. In our opinion, the fact that business people need to keep in touch with their offices, even when the quality of service is poor, is an opportunity that BREW has largely overlooked so far. QIS has announced plans to work with Oracle to extend Oracle support to the BREW platform.
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